People use credit cards as the easiest method of payment nowadays. They are tiny plastic cards issued to the user from the bank. This is a very convenient form of money transaction to the customers as it helps the user to carry less money reducing the risk of the money being stolen. It is like providing a short term loan to the customers. Even the shop keepers are benefited by credit card transactions even though they are charged fees for the privilege of accepting credit cards since it results in less money on the premises of the shop, thus seeing to it that the staff does not engage in stealing of cash. To be more precise, the merchant must pay interchange fees and discount fees on all credit card transactions. The issue of the card is made only after the user confirms an account in his name in the corresponding bank. Then the cardholder can make purchases using the credit card at places the shopkeepers accept credit cards. The user agrees to pay the money by signing a receipt. The shopkeeper checks the credit using a system known as Electronic verification. In less than a few seconds the shopkeeper can ensure whether the card is still valid and that the cardholder has sufficient balance to cover the expense of the purchase made. From the date of each purchase the user has to pay an interest agreed on before; if the total balance is not paid in full in the same month. This system puts a greater check on fraud practices. Now a days we all have to be extremely careful about all the fraud that seems to be out there. Fraud is one of the leading expenses a credit card company will have. Some estimate that if fraud were completely eliminated, credit card holders could get rates nearly 1/2 off what they are currently. It hurts both the holders as well as the big credit card corporations
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